Former nonprofit head gets 15 months for embezzlement

The former head of a New Orleans nonprofit organization who embezzled tens of thousands of dollars in public grant money was sentenced Wednesday to 15 months in prison, prosecutors said.

Marcia Peterson, who served as the executive director of CDC 58:12, a faith-based community development group, also was ordered to pay $91,000 in restitution and to serve three years of supervised release after her prison term, said Anna Christman, a spokeswoman for U.S. Attorney Kenneth Polite.

Peterson pleaded guilty in August to stealing nearly $25,000 from the U.S. Department of Education and more than $62,000 from the Department of Housing and Urban Development. She also admitted to falsifying claims for unemployment benefits from the Louisiana Workforce Commission.

Court filings indicate Peterson has suffered from a gambling addiction. She was sentenced by U.S. District Judge Martin Feldman.

CDC 58:12, a group that supposedly was working to rebuild the Upper 9th Ward, had an agreement through the Louisiana Department of Education, under a federal program known as 21st Century Community Learning Centers, to provide “educational services through the creation and use of a community learning center in Orleans Parish,” according to court records.

Those funds had been the group’s primary source of income, the records say, and Peterson would routinely file “documentation to LDOE to justify expenditures of 21st Century funds and represented that all funds were properly spent.”

In fact, Peterson had been stealing program money by withdrawing funds from the nonprofit’s bank account “for gambling and other personal purposes,” according to court documents.

Peterson’s group also had been receiving federal funding through the Housing Authority of New Orleans to provide social services for families in The Estates, the public housing complex formerly known as Desire. She embezzled thousands of dollars through her organization’s contract with HANO and the city of New Orleans through the federal Community Development Block Grant program.

HANO’s former chief, David Gilmore, said earlier this year that he terminated HANO’s contract with the nonprofit last year after he learned Peterson was under federal investigation.

CDC 58:12 derives its name from a passage in the Book of Isaiah. The organization’s website, which still lists Peterson as executive director, credits Peterson for facilitating “thousands of volunteers who continue to come and work in New Orleans even years after” Hurricane Katrina.

The verse from Isaiah reads as follows: “And the places that have been desolate for ages shall be built in thee: thou shalt raise up the foundations of generation and generation: and thou shalt be called the repairer of the fences, turning the paths into rest.”